New WTO Texts Lacklustre for Africa

In an effort to make a pre-Christmas delivery on the Doha Development Agenda, the WTO issued ‘new’ negotiating texts over the past weekend. In short there are some innovative drafting ruses, like swapping figures in ranges just for straight mid-points, but essentially there is little radical movement in these documents and they are more like facelifts as opposed to fresh faces for African eyes.

Let us start by stepping back just a week. On 2 December the United Nations Conference on Trade and Development held a session in Geneva headed the ‘UNCTAD Secretary-General’s Multi-stakeholder meeting on Cotton’. The session focused on global challenges to the cotton sector, and need we highlight that the development paradigm in the Doha negotiations has become the mandate that cotton be treated ‘ambitiously, expeditiously and specifically’. This wording has been a development rallying call that has been made since 2004, but has remained elusively unheeded. The WTO has a direct and uncomfortable sense of this. This is clear from the WTO DG Lamy’s statement at last week’s UNCTAD meeting, where he recognised rather pointedly that: ‘if we are here today, it is because cotton has become a litmus test of the commitment to make the WTO Doha Round of global trade negotiations a truly development round.’ He then added rather candidly that: ‘there is unanimity that without a deal on cotton there can be no modalities on agriculture and industry, and without modalities we will not be able to open the road which leads to the conclusion of the Round’. Rather lucid observations indeed.

This being said and less than 1 week later, it is then almost flabbergasting that agriculture negotiations Chair Falconer’s revised text issued on 6 December is completely void of any new suggestions on a Doha cotton deal. In fact the cotton text remains completely unchanged from the July 2008 text, which had itself not seen any change for around 24 months prior to that. How is this oddity to be reconciled with Lamy’s statements and more intriguing is what does this says about the rest of the facelift texts, both in agriculture and in industrial products?

Falconer comments in the preamble to his facelift text that negotiators have: ‘a robust and common view on the numbers that need to be crunched to get a final decision’ on cotton. We glean from reports on recent engagements by cotton negotiators that this ‘robust common view’ ranges in cuts on trade distorting cotton subsidies of between $200 million and $1 billion – a mere 500% divergence. With very scant progress on an already arcane agriculture negotiating text, Lamy seems to be careering ahead, summoning the usual suspects to Geneva for a mini (or maxi) Ministerial meeting. The endorsement that has been on a hard sell media marketing campaign for the last month has supposedly been drawn from the November 2008 mandate provided by the meeting of the G20 counties in Washington. What oddly seems to be absent from this supposedly solid mandate is a realisation that the G20 meeting, with the G20 de facto led by the US, was facilitated by outgoing US president Bush who only holds any authority in the US on paper. President elect Obama was decidedly and perhaps shrewdly not associated with the G20 meeting in any way. The veracity of this mandate, with world leaders needing to point to all possible outlets to show that they have the means to solve the global financial crisis, is far from solid and remains to be robustly tested. It is also becoming evident that the Obama negotiators in waiting may have a decidedly different stance from the incumbent USTR Schwab.

From the developing country perspective we note that Brazilian Foreign Minister, Celso Amorim, is rearing to go and has pressed Pascal Lamy to convene the Geneva high level meeting with some haste next week. In the run up to the latest texts, one had the suspicion that Brazil had essentially blessed the revision before it was conceived and endorsed the texts prior to their being issued. Developing countries would do well to recall that less than 5 months ago Brazil all but sold out the (other) G20 configuration in favour of the US and EU and supported the July ‘Lamy Compromise’ on the purported promise of a side deal which would see Brazilian access to these lucrative 1st world markets for ethanol improve dramatically. The bullish Brazilian stance has seemingly endured over the last few months and speculatively that side deal is still in the offing. This suspicion is compounded by the fact that Brazil has all but abandoned its WTO dispute settlement action against US agricultural subsidies which it co-initiated back in 2007.

For SACU, it would be prudent, within or outside of a SACU specific NAMA carve out, which the EU and US opposed last week, to be wary of being ‘married’ to the G20, and forget that as the G20 leader Brazil essentially sold the G20 out in July to get that special side deal on ethanol access into the EU and US. At this time it would be extremely prudent for SACU negotiators to consider who their ‘allies’ are, and carefully consider whether the region has any muscle to stand their ground when the point arrives when SACU might become isolated on their NAMA carve out when a wider deal over shadow’s its own special needs.

Would a WTO ministerial meeting next week be prudent based upon these new texts? Well borrowing from the agriculture chair’s assessment on the cotton mandate in the latest text we might inadvertently have a lucid portent of where a ministerial meeting might be headed next week:
‘I regret that I can only report that neither I nor, as far as I can tell, anyone else involved in the consultations are any wiser today on what the deal will be than we were in July’.

Good luck to the trade ministers, they are going to need it if even a smattering of Christmas cheer is to be in the trade stocking this year.